DecisionPoint Systems Announces First Quarter 2024 Results
DecisionPoint Systems (NYSE: DPSI) announced its Q1 2024 financial results, highlighting the impact of the absence of large hardware projects but showing improved gross margins due to a shift towards services and software.
The company reduced its debt by over $1.6 million and increased cash by $1.5 million. Key developments include the introduction of PointCare services and securing a significant managed services contract with a leading C-store chain, expanding recurring revenue.
DecisionPoint plans to launch new services under StoreCare and SiteCare brands in Q2 2024. The company will not host a conference call this quarter due to its impending transaction with Graham and Barcoding, which is expected to close in July.
- Gross margin improved due to a shift towards services and software.
- Debt reduced by over $1.6 million.
- Cash increased by $1.5 million.
- Introduction of PointCare services.
- Secured a significant managed services contract with a leading C-store chain.
- Expansion of managed services recurring revenue backlog.
- Planned launch of new service offerings under StoreCare and SiteCare brands in Q2 2024.
- First quarter results impacted by the absence of large hardware project business.
- No conference call this quarter due to the focus on the impending transaction with Graham and Barcoding.
Insights
The first quarter results of DecisionPoint Systems reveal a structured shift towards services and software, which contributed to an improvement in gross margins. Although the absence of large project business on the hardware solutions side impacted revenues, the company managed to reduce its
The Mobile Managed Services strategy seems promising, particularly with the introduction of PointCare services. These initiatives have already led to a significant managed services contract with a C-store chain, enhancing the company's recurring revenue backlog. This is important for stabilizing future cash flows.
The impending transaction with Graham and Barcoding, valued at a
DecisionPoint Systems' strategic pivot towards managed services, particularly the PointCare services, suggests a keen understanding of market needs. The focus on store-level services for technology maintenance indicates a clear shift from selling products to offering comprehensive solutions, which can drive higher customer retention and loyalty.
The launch of StoreCare and SiteCare brands in the second quarter appears to be a significant step in expanding the company's Total Addressable Market (TAM). By moving from discrete device-level services to holistic store or site-level services, DecisionPoint is positioning itself to capture a larger share of the market, particularly in the retail and supply chain sectors.
However, the success of these initiatives will depend heavily on execution and the ability to scale these services without compromising quality. This shift aligns with industry trends favoring subscription-based, recurring revenue models over one-time hardware sales.
Steve Smith, chief executive officer of DecisionPoint Systems, commented: “Our first quarter results were impacted by the absence of any large project business on the hardware solutions side of the business. However, our gross margin improved with the mix shift towards services and software. We also reduced our debt by over
“With our continued focus on services, our investments in 2023 are already starting to pay off, and we anticipate our Mobile Managed Services strategy will drive sales of our newer offerings throughout this year. During the first quarter, we continued to build out this part of the business by introducing PointCare services, which include existing and new services. This offering served as the foundation for an early win, as we secured a large managed services opportunity with a leading C-store chain to provide store-level, on-site services to maintain several in-store technologies and devices. This win was a significant add to our managed services recurring revenue backlog. It also represents an exciting opportunity to expand from providing mobile managed services for devices to delivering managed services for an entire store or site with a much larger TAM versus discrete device-level services. We will formally launch these new service offerings in the second quarter under the StoreCare and SiteCare brands.
“Given our impending transaction with
About DecisionPoint Systems
DecisionPoint Systems Inc. delivers mobility-first enterprise managed services, in-store retail solutions centered around point-of-sale technologies, deployment, integration and support services to retail, supply chain, hospitality, healthcare and other verticals, enabling customers to make better and faster decisions in the moments that matter—the decision points. Our mission is to help businesses consistently deliver on those moments—improving customer service, accelerating growth, improving worker productivity and lowering risks and costs. For more information about DecisionPoint Systems, Inc., visit https://www.decisionpt.com.
Forward-Looking Statements
In this press release, all statements that are not purely about historical facts, including, but not limited to, those in which we use the words "believe," "anticipate," "expect," "plan," "intend," "estimate, "target" and similar expressions, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. While these forward-looking statements represent our current judgment of what may happen in the future, actual results may differ materially from the results expressed or implied by these statements due to numerous important factors, including, but not limited to, those described in our most recent report on SEC Form 10-K (under the headings "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations"), which may be revised or supplemented in subsequent reports on SEC Forms 10-Q and 8-K. We are under no obligation, and expressly disclaim any obligation, to update the forward-looking statements in this press release, whether as a result of new information, future events or otherwise.
DecisionPoint Systems, Inc. Consolidated Balance Sheets (in thousands, except par value) |
||||||||
March 31, |
December 31, |
|||||||
2024 |
2023 |
|||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash | $ | 5,834 |
|
$ | 4,300 |
|
||
| Accounts receivable, net of allowance of |
19,292 |
|
23,768 |
|
||||
| Inventory, net | 1,193 |
|
2,133 |
|
||||
| Deferred costs | 4,158 |
|
3,826 |
|
||||
| Prepaid expenses and other current assets | 598 |
|
630 |
|
||||
| Total current assets | 31,075 |
|
34,657 |
|
||||
| Operating lease assets | 3,208 |
|
3,392 |
|
||||
| Property and equipment, net | 2,889 |
|
2,973 |
|
||||
| Deferred costs, net of current portion | 3,744 |
|
3,689 |
|
||||
| Deferred tax assets, net | 1,475 |
|
1,161 |
|
||||
| Intangible assets, net | 7,317 |
|
7,815 |
|
||||
| Goodwill | 22,204 |
|
22,081 |
|
||||
| Other assets | 172 |
|
172 |
|
||||
| Total assets | $ | 72,084 |
|
$ | 75,940 |
|
||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 14,575 |
|
$ | 16,857 |
|
||
| Accrued expenses and other current liabilities | 5,607 |
|
6,566 |
|
||||
| Deferred revenue | 9,222 |
|
8,066 |
|
||||
| Current portion of earnout consideration | 5,550 |
|
5,370 |
|
||||
| Current portion of long-term debt | 1,003 |
|
1,003 |
|
||||
| Current portion of operating lease liabilities | 888 |
|
874 |
|||||
| Total current liabilities | 36,845 |
|
38,736 |
|
||||
| Deferred revenue, net of current portion | 5,298 |
|
5,307 |
|
||||
| Revolving line of credit | - |
|
1,300 |
|
||||
| Long-term debt, net of current portion | 3,388 |
|
3,639 |
|
||||
| Noncurrent portion of operating lease liabilities | 2,862 |
|
3,093 |
|
||||
| Long-term portion of earnout consideration | 4,692 |
|
4,316 |
|
||||
| Other liabilities | 6 |
|
6 |
|||||
| Total liabilities | 53,091 |
|
56,397 |
|
||||
| Commitments and contingencies | ||||||||
| Stockholders’ equity: | ||||||||
| Preferred stock, |
- |
|
- |
|
||||
| Common stock, |
8 |
|
8 |
|
||||
| Additional paid-in capital | 39,184 |
|
38,902 |
|
||||
| Accumulated deficit | (20,199 |
) |
(19,367 |
) |
||||
| Total stockholders’ equity | 18,993 |
|
19,543 |
|
||||
| Total liabilities and stockholders’ equity | $ | 72,084 |
|
$ | 75,940 |
|
||
DecisionPoint Systems, Inc. Consolidated Statements of Income and Comprehensive Income (in thousands, except per share data) |
||||||||
Three Months Ended |
||||||||
March 31, |
||||||||
2024 |
2023 |
|||||||
| Net sales: | ||||||||
| Product | $ | 15,317 |
|
$ | 22,166 |
|
||
| Service | 10,301 |
|
4,873 |
|
||||
| Net sales | 25,618 |
|
27,039 |
|
||||
| Cost of sales: | ||||||||
| Product | 12,488 |
|
17,885 |
|
||||
| Service | 7,119 |
|
3,104 |
|
||||
| Cost of sales | 19,607 |
|
20,989 |
|
||||
| Gross profit | 6,011 |
|
6,050 |
|
||||
| Operating expenses: | ||||||||
| Sales and marketing expense | 2,813 |
|
2,368 |
|
||||
| General and administrative expenses | 4,096 |
|
2,494 |
|
||||
| Total operating expenses | 6,909 |
|
4,862 |
|
||||
| Operating (loss) income | (898 |
) |
1,188 |
|
||||
| Interest expense, net | (248 |
) |
(13 |
) |
||||
| (Loss) income before income taxes | (1,146 |
) |
1,175 |
|
||||
| Income tax benefit (expense) | 314 |
|
(309 |
) |
||||
| Net (loss) income and comprehensive (loss) income attributable to common stockholders | $ | (832 |
) |
$ | 866 |
|
||
| Net (loss) income per share attributable to stockholders: | ||||||||
| Basic | $ | (0.11 |
) |
$ | 0.12 |
|
||
| Diluted | $ | (0.11 |
) |
$ | 0.11 |
|
||
| Weighted average common shares outstanding | ||||||||
| Basic | 7,681 |
|
7,417 |
|
||||
| Diluted | 7,889 |
|
7,789 |
|
||||
DecisionPoint Systems, Inc. Consolidated Statements of Cash Flows (in thousands) |
||||||||
| Three Months Ended | ||||||||
| March 31, | ||||||||
2024 |
2023 |
|||||||
| Cash flows from operating activities | ||||||||
| Net (loss) income | $ | (832 |
) |
$ | 866 |
|
||
| Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities: | ||||||||
| Depreciation and amortization | 743 |
|
564 |
|
||||
| Share-based compensation expense | 279 |
|
196 |
|
||||
| Deferred income taxes, net | (314 |
) |
10 |
|
||||
| Provision for credit losses | 57 |
|
68 |
|
||||
| Provision for inventory obsolescence | (6 |
) |
45 |
|
||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | 4,419 |
|
(9,413 |
) |
||||
| Inventory, net | 946 |
|
(1,551 |
) |
||||
| Deferred costs | (387 |
) |
(212 |
) |
||||
| Prepaid expenses and other current assets | 32 |
|
(75 |
) |
||||
| Accrued expenses and other current liabilities | (526 |
) |
(1,871 |
) |
||||
| Operating lease liabilities | (33 |
) |
(24 |
) |
||||
| Deferred revenue | 1,147 |
|
6,394 |
|
||||
| Net cash provided by (used in) operating activities | 3,243 |
|
(1,496 |
) |
||||
| Cash flows from investing activities | ||||||||
| Purchases of property and equipment | (161 |
) |
(176 |
) |
||||
| Net cash used in investing activities | (161 |
) |
(176 |
) |
||||
| Cash flows from financing activities | ||||||||
| Proceeds from term loan | - |
|
5,000 |
|
||||
| Repayment of term debt | (251 |
) |
(1 |
) |
||||
| Line of credit, net | (1,300 |
) |
7,000 |
|
||||
| Proceeds from exercise of stock options | 3 |
|
6 |
|
||||
| Net cash (used in) provided by financing activities | (1,548 |
) |
12,005 |
|
||||
| Change in cash | 1,534 |
|
10,333 |
|
||||
| Cash, beginning of period | 4,300 |
|
7,642 |
|
||||
| Cash, end of period | $ | 5,834 |
|
$ | 17,975 |
|
||
View source version on businesswire.com: https://www.businesswire.com/news/home/20240515822783/en/
Investor Relations Contact:
Brian Siegel, IRC, MBA
Senior Managing Director, Hayden IR
(346) 396-8696
Brian@haydenir.com
Source: DecisionPoint Systems, Inc.
FAQ
What are the key highlights from DecisionPoint Systems' Q1 2024 results?
How did DecisionPoint Systems perform financially in Q1 2024?
What new services did DecisionPoint Systems introduce in Q1 2024?
What impact did the absence of large hardware projects have on DecisionPoint Systems' Q1 2024 results?
Why is DecisionPoint Systems not hosting a conference call this quarter?
